Tuesday, December 15, 2009

Making it pay--how driving an older vehicle can actually pay you back!

Well, not in a literal sense anyway, but the thing you have to remember as you're picking out your next car is every mile the car gives you, you're getting some of your money back from the vehicle that you're driving.  What you need to decide is how much.  For every mile I drive any of my cars, I say the car pays me back $.10.  That means that in it's entire 125,000 mile life, the Volvo has now paid back $12,500 to it's respective owners.  Since I've had the car for approximately 25,000 of those 125,000 miles, the vehicle has paid me back $2500.

The nice thing about this, is you can decide when a car has paid you back, and when it hasn't.  I use $.10 per mile because it's a nice round number, and very easy to calculate in my head.  If I'd bump it up to $.20 the car would have already paid for itself...and up to $.25 the car would already be paying me back.  At $.10 per mile any car over $20,000 would never pay back the person who bought it originally without keeping the vehicle for years.  The reason for this is many of the repairs those of us have to put into an older vehicle.  To give you an idea, I've put nearly $3500 into repairs and maintenance on the Volvo, which means I would have to drive the car 35,000 miles for the car to pay back those repairs.  If you've already driven your car 200,000 miles, chances are you're not going to want to put another 35,000 miles on it just to pay back some repairs you made...and you're certainly not going to get $3500 for any car with 200,000 miles on the odometer.

If somehow I can make it to 200k without having to put any more money into repairs, the Volvo will end up paying me back $7500 over the course of it's life.

So, that being said, what method do you use to calculate when your car has paid you back?

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